Enrollment Management at UW-Madison

UW-Madison is bringing a proposal before the UW System Board of Regents this week to change the cap on the percentage of undergraduates from out-of-state from 25 to 30%.

In this post, I'm going to focus on the factual basis for the proposal itself.  I'm not going to speak to the process through which it was brought to the Regents, which I am fairly certain violated shared governance. I'm just going to examine the veracity of statements the UW-Madison Administration has made in support of this proposal using publicly available data.  I think the numbers alone suggest a need for further consideration before any decisions can be made. This motion should be tabled.

In its proposal, Madison makes the following remarks:

1. The UW Admissions Policy counts Minnesota residents -- who receive tuition reciprocity--  in a separate category, and thus they are not counted as either residents or non-residents.  This is uncommon.  It means that the percent of out-of-state students (OOS) cannot be used to fully understand access for Wisconsin residents.  It leaves the general public with the impression that a cap of 25% on OOS means that Wisconsin residents comprise 75% of the institution.  They do not.  At UW-Madison, Wisconsin residents are 63% of the undergraduate enrollment.  

This calculation is especially important when comparing the percentage of OOS in UW System or Madison to the percentage at other institutions.  In repeatedly stating that UW-Madison is "alone in the Big 10" in having a cap on non-resident enrollment, the Administration neglects three facts:

• Many schools in the Big 10 have alternative options for high- achieving students in the state-- another flagship, or a set of very highly respected private schools.  These help restrict the market of the Big 10 school for out-of-state students, such that a cap isn't needed. In addition, in one case a Big 10 school is private (Northwestern) and in two others, their origins make them defacto private (U. Michigan and Penn State). Those different missions make the comparison irrelevant.
• When counting only Wisconsin residents as in-state students, the state ranks in the bottom 15 of state public institutions serving in-state residents.  Pennsylvania, Virginia, New York, Minnesota, North Carolina, Washington, Illinois, Ohio, Texas etc-- all have institutions enrolling a higher fraction of in-state students than we do. It cannot be said, then, that Madison is "behind the times" in enrolling out-of-state students.  It is behind-the-times in offering discounted tuition at UW-Madison to students in Minnesota, whose families are wealthier than those in Wisconsin. (Sidenote: Perhaps reciprocity could continue at other UW universities, where OOS enrollment is much lower and MN plays a more important role-- while ending reciprocity at Madison.)

2. This year, the enrollment composition of new freshmen at Madison changed.  According to the proposal, "The unanticipated and increased number of non-resident freshmen choosing to enroll at UW-Madison contributed to UW-Madison’s non-resident enrollment of 25.8%." This suggests that the unanticipated "surprise" was in the yield of non-residents-- specifically, the number of admitted students who chose to attend the university.

Let's take a closer look.  This document shows that this year, the number of applicants to UW-Madison went up by 51 students. The number of admitted students, however, went up by 1,214. In other words, UW-Madison accepted 54.6% of those who applied, up from 50.05% in 2011. Who were the students accepted at so much higher rates? Unsurprisingly, 61% of them were international students.  In other words, UW-Madison saw a 4% growth in the rate of applications among international students, and matched that with a 53% increase in the acceptance rate of those students (it jumped from 26.9 to 41.3%). There's no way that happened by accident-- admissions decisions are made by a thoughtful staff carefully overseen by a team of professionals.  Admissions, unlike yield, can be completely controlled by the institution.  Now, however,  the yield of those international students was 30.6%-- a number that Provost DeLuca apparently found surprising.  This probably because the yield the prior year was 20.5% but that was clearly an off year-- the average yield for international students over the prior nine years was 35.6%!  I'm sure the hard working people in Academic Planning knew better than to base their projections for yield on one year of data.

Therefore, it was clearly the decision to increase the admission rate of international students, and not the "unanticipated and increased number of non-resident freshmen choosing to enroll" that drove up the percent of non-resident students. 

That was the "surprise" in 2012.  Sure, Madison decided to admit more Wisconsin residents, despite a decline in applications, but that was clearly a strategic move to ensure that the cap wasn't further displaced.  The Administration made a calculated decision to go after international students, and now claims that "whoops we hit the cap"-- and asks that the cap be removed.

3. The document then goes on to make the case that OOS students contribute to the learning experience at UW-Madison.  This "diversity" argument relies heavily on the interaction occurring among students  on campus.

Regarding this, two facts should be noted:

• OOS students attending UW-Madison are much wealthier than Wisconsin residents. This study by scholars at La Follette shows that both Minnesota students and those from other states have average family incomes of around $100,000 (MN) and up-- approaching $130,000 for those from other states. In comparison, the average family income of Wisconsin residents attending UW-Madison is under $80,000.  Such socioeconomic differences are not easily overcome on college campuses, and the documented reality in both research studies and on our own campus is that these students live in different worlds. "Lucky" is a dorm inhabited by the "Coasties" and inaccessible to most Wisconsin students.  Students recruited from out-of-state enjoy family resources and experiences that compel them to seek amenities at UW-Madison which Wisconsin residents simply don't demand (heck, they are saving on tuition compared to their likely private alternatives).  This in turn creates pressure on student fees and creates a "keeping up with the joneses" situation.  It would be helpful to see evidence that diverse socioeconomic interactions on campus and in classrooms are being fostered at Madison before we invest further in bringing more wealthy students-- as opposed to more low-income students-- to campus. 
• In making its argument, the University seems to treat Minnesota students as if they are just like Wisconsin residents. In fact, they are not, demographically speaking. And they comprise 12% of undergraduates.  If the mix is 63% Wisconsin and 37% non-Wisconsin, is that insufficient geography diversity to ensure good learning experiences?  How much within-Wisconsin geographic diversity is achieved now?

4. The proposal promises to reserve at least 3,500 seats at UW-Madison for Wisconsin residents.  It notes, "Since the number of Wisconsin high school graduates is declining and will continue to
decline over the next several years, the proposal to commit to enrolling 3,500 Wisconsin resident new freshmen by admitting 200 more Wisconsin resident students represents an enrollment of a higher fraction of the high school class than in recent years, and a higher number than the average of the past several years."

Here, are additional facts needed for context.

• While birth rates are declining, the fraction of students seeking to attend college is rising.  Rates of ACT-test taking are rising (and will go up further as it becomes mandatory) and so are FAFSA completion rates. These factors will eventually grow the Wisconsin resident applications.  There is little evidence of decreased interest in UW-Madison.  Applications and yields are down somewhat among Wisconsin residents, yes, but that decline coincided with the recession and Madison's tuition hike (Madison Initiative for Undergraduates). It cannot be said to be divorced (or necessarily related) to those changes.
•  UW-Madison is already turning down about 1,000 well-qualified Wisconsin residents each year. This proposal addresses just one-fifth of that need.  It leaves 800 well-qualified students to very likely go out-of-state to college, or "undermatch" in-state. That is a form of brain drain currently not tracked (Madison only reports on where their accepted students go, not where their applicants who are not accepted go-- the latter would give a fuller picture of their enrollment management policy impacts). 
• There is clear room for improvement in recruiting students to apply to Madison. This report indicates that at UW-Madison "efforts to increase the enrollments of students from smaller Wisconsin communities need continued and sustained focus on recruiting and outreach to high schools in these communities." Other efforts, such as going "test-optional" in acknowledgement of the systematic racial bias present in the ACT and SAT, would also boost the size of the applicant pool, and diversify it-- though it's sure to be met with racially-tinged charges of a "weakened applicant pool."

5. The proposal says that in order to fix the "mistake" of a higher-than-expected yield of out-of-state (international) students, "UW-Madison would have to enroll about 3,700 resident students in the fall new freshman class each year—a number that far exceeds historic levels and that would create additional financial pressures and bottlenecks."

But, the earlier statement said that Madison would commit to 3,500 seats. Are we to believe that 200 additional students are impossible to find and impossible to afford-- and would create "bottlenecks"-- despite the "Educational Innovation" going on around us?

Finally, shouldn't this have occurred to the Administration before it rashly made the decision to dramatically increase acceptances of international students? A decision it never discussed with shared governance bodies?

Caps are put into place by states to provide a balance against institutional behavior that is self-interested.   I wish it weren't needed here. But institutions respond to incentives.  The cap exists to protect Madison from its own rational impulses, requiring it to balance these with the needs of the state. No other check on the revenue-maximizing instincts of the Administration exists. And clearly, this Administration is mainly about maximizing revenue-- not about shared governance, not about access or affordability, and not about transparency.

The Administration claims that even with the cap lifted UW-Madison will not race to hit the 30% mark. I  see little reason to believe this.  Chancellor Ward is leaving campus, and there is no check on what will happen in his absence.  It's clear that the people in power under Biddy Martin are still running the show. Old habits die hard.

Our Students Aren't Customers

At Monday's Faculty Senate meeting, I'll deliver the annual report from the Committee for Undergraduate Recruitment, Admissions, and Financial Aid (CURAFA). I have chaired that committee for several years, and while it is not usually something I discuss on this blog, I want to address a comment I made at the last meeting.

At that meeting, my colleague Adam Gamoran delivered a report from the committee on faculty compensation, and as part of that report suggested that the university raise more funds to pay faculty by increasing the overall number of undergraduates from out-of-state (OOS). He was not suggesting we decrease the number of in-state (IS) students, but rather that we grow the total number of undergraduates by enrolling more OOS students.

As CURAFA had not been told this suggestion was forthcoming, and I had not read his committee's entire report for the meeting (my fault), this took me by surprise.  In keeping with my scholarly work on higher education policy, I was aware of the likely reaction from students and the public to a proposal that could easily be read as an effort to put on onus on students and families to fund salary increases. Of course, Adam meant that this was needed only because the state wasn't doing its job of funding the university, but it was also clear right away that this wasn't the media message that would carry.  Further, the idea of increasing enrollment among OOS students was something CURAFA had discussed several times with the Office of Admissions, and it was clear from those conversations that this strategy was much easier said than done.

That is because the percent of OOS who enroll at Madison after being accepted is quite low. That "yield rate" is just 22% for domestic non-residents (this excludes Minnesota) -- lower than the national averages for public universities.  The large gap between applications and enrollments among OOS students is a function of many things-- many students apply to large numbers of institutions to improve their odds of admissions or odds of getting multiple offers that can be negotiated, and also many OOS students expect to be offered a nice merit scholarship to induce their attendance.  Yield is thus a far better indicator than applications of how many students truly prefer UW-Madison and can afford to attend it without scholarships.  The latter shouldn't matter generally, but in the case of OOS students, if we have to heavily discount their costs then we will not generate enough revenue to fund the growth in compensation the faculty desire.  Recent trends indicate that discounting is beginning to fail as a mechanism for attracting students, more of whom seem put off by the higher tuition charged for OOS students at public institutions, and private institutions more generally.  Moreover, UW-Madison is unique is being among a handful of public universities bucking the trend of shifting most financial aid from need-based to merit-based-- giving out relatively few scholarships to freshmen (scholarships to upperclassmen are another matter).

A few more specifics. Over the last ten years, UW-Madison's yield rate among domestic non-residents dropped from 26%  to 22%, even as applications for that group doubled.  During the same period, the yield among international non-residents dropped from 37% to 20%, as applications for that group increased sixfold.  But during that time the yield among Wisconsin residents grew from 60 to 62%, while the number of applications remained steady.   That yield among Wisconsin residents is very high, much higher than the national average, and is likely indicative of demand for more seats among Wisconsin taxpayers.

So the punchline is this:  demand among OOS students for enrollment at UW-Madison simply isn't very strong. That's what I honestly intended to say to the Faculty Senate in my remarks. Accomplishing what Adam's committee was suggesting therefore requires shifting (a) the distribution of merit-based aid, and/or (b) the admissions standards for OOS students.  Right now admissions standards appear to be applied similarly for IS and OOS students, on average.  Unless merit-based aid is used to increase the yield substantially, and unless that discounting is actually successful, growing the number of OOS students would require accepting more OOS students-- and this likely means digging deeper into the application pool.  It is an open and important question as to whether UW-Madison, its faculty, and its constituents want to have differential admissions standards based on residency.  That discussion should be had upfront and publicly, and should not be secondary to (or disguised behind) questions about whether the strategy will generate money.  That has been my point all along, and one I am admittedly quite emotional about since it's my view that UW-Madison's greatest strength is its commitments to high-quality education and service to the state, and its longstanding tradition (including among faculty) of putting those things ahead of monetary concerns.   Ours is not a culture rife with showy displays of consumption; instead we dig in and we focus on our students and our research.

Sadly, I failed in my remarks to make these points.  Moved to respond quickly and without time to gather myself sufficiently, instead I erred in suggesting that the applicant pool of OOS students was weaker academically than that for in-state students. The publicly available evidence (presented in terms of group averages) does not show this to be true, and I regret that I was not better prepared to state my concerns about the yield rate better, or able to discuss why I have some reservations about the data we do have available.  In the future I hope CURAFA and committees making recommendations related to admissions and financial aid will communicate better, so that we can all be better equipped to respond on the spot to proposals and questions at Senate.

Now, I know that some will contend we can simply increase the yield of high-achieving students with better recruitment. I disagree, mainly because this will require substantial additional resources for our relatively small admissions office (eating up the projected revenues from the new students), our Badger Alumni are already doing yeomen work, and because we are losing high-achieving OOS students to places we simply cannot and arguably should not be competing with.  For this group, our yield is just 15% -- 35% go to private institutions like Northwestern, 23% end up staying in-state, and 19% go to another out-of-state institution.   To capture the latter two groups, we have to spend more money through effective discounting -- recruitment alone won't do it.

I'll close with some final words about the overall strategy of using OOS students to increase revenues. It sounds too good to be true because it is.  Yes, it seems efficient and even equitable--if you support redistribution among students).  But as Christopher Newfield has pointed out, the "market-smart and mission centered" approach has a thin empirical evidentiary basis (in fact  more examples of market failures than market successes surround us these days) and brings with it some slippery-slope unintended consequences.  Here's one we are all familiar with: over time, UW-Madison has begun to feel more and more elite-- to both the faculty and to the state.  John Wiley spoke of this concern when he was chancellor, and commissioned a study to look at whether in fact family income among UW-Madison students was increasingly out-of-step with Wisconsin family incomes.  The answer in short is that the reason it feels this way is because of the increasingly high family incomes of OOS students.  The growing proportion of students from wealthier families on campus changes the feel of the place in ways both large and small-- they drive demand for more luxurious accommodations and services (witness Lucky!), enjoy clothing and other aspects of conspicuous consumption that make it harder than ever to "keep up with the Joneses,"and utilize their extensive networks and connections to take on powerful positions help lead votes to charge higher tuition and increase spending, so that UW-Madison will look like the private institutions where their friends attend.  Some even use the higher graduation rates of these more-advantaged OOS students to suggest (without any empirical evidence) that they graduate faster because they pay more.   Sure, they bring greater income and geographic "diversity" to some degree (though the real underrepresentation continues to be among students from below the poverty line) and some will say it broadens the horizons of all student-- but at the same time these changes make the flagship feel less and less like it's part of Wisconsin.  And therein lies the long-term problem.

Madison is not an island. It cannot hover into space, pulling apart from its land. Madison is Wisconsin.  And decisions about changing the degree to which it remains Wisconsin should be make democratically and discussed publicly, openly, and frequently and in arenas that separate these important questions about educational quality and climate from the ever-present, neo-liberalizing discussions about markets and revenue.  Treating our students as students, and not paying customers, is the very least we owe them.